BLACKSBURG, Va. (WFXR)– Borrowers get ready!

The one-time student loan forgiveness application is about to drop. According to the United State Department of Education, it’s projected to be released sometime this week, or by next week.

The federal government says the student loan forgiveness application allows roughly 40 million borrowers to be eligible for some type of debt relief, while others might have their entire balance canceled.

However, some loans will not be forgiven.

According to the Federal Student Aid website, anyone with privately held loans not through the u.s. department of education is not eligible for debt relief.

The deadline to consolidate for eligibility was September 29th, 2022.

So, now the big question is who is eligible?

  • Undergraduate and Graduate Direct Loans
  • Parent PLUS and Grad PLUS Loans
  • Consolidation Loans (with Underlying loans disbursed on or before June 30th, 2022.
  • Federal Family Education Loan (FFEL) Program Loans held by the United States Department of Education
  • Perkins Loans held by the United States Department of Education
  • Defaulted Loans (ED- held or commercially services Subsidized, Unsubsidized, parents PLUS, grad PLUS, and Perking held by ED.

However, your income must be $125,000 (or $250,000 for households) or less to receive up to $10,000 in debt relief.
If you are a recipient of Pell Grants, you can receive up to $20,000.

Some college students say this takes the burden off of affording an education.

“I think lifting some of that weight off of students is something that is really good so they can focus on education instead of the way they’re going to fund their education,” said Vicky Thomas, a Virginia Tech Student.

Another Virginia Tech student says he is happy that some of the burdens will be lifted off of his friend’s shoulders.

“I feel like it means a lot more than just like the money itself because they are here for the education. They don’t want to be worried about the stress of debt and getting through the actual college,” Corey Crum.

Borrowers should also know, you can opt-out of the forgiveness program.

This comes after a lawsuit was filed because some borrowers will be stuck with the burden of a tax bill with the automatic relief.

Although, if you want to get ready, the Federal Student Aid website has a step-by-step breakdown of what you can do:

Step 1: Check if you’re eligible

You’re eligible for student loan debt relief if your annual federal income was below $125,000 (individual or married, filing separately) or $250,000 (married, filing jointly or head of household) in 2020 or 2021.

  • $20,000 in debt relief: If you received a Pell Grant in college and meet the income threshold, you’ll be eligible for up to $20,000 in debt relief.
  • $10,000 in debt relief: If you did not receive a Pell Grant in college and meet the income threshold, you’ll be eligible for up to $10,000 in debt relief.

Step 2: Prepare

Here’s what you can do to get ready and to make sure you get our updates:

Step 3: Submit your application (when available)

The application will be available online in October 2022.

We’ll share updates on this page and send you an email when the application is available. You’ll have until Dec. 31, 2023, to submit your application.

A new congressional analysis shows that this student loan forgiveness could cost the federal government 400 billion dollars in a 30-year period.